The ASG Critique

This blog is dedicated to commentaries that relate to specific issues concerning American Samoa's Government (ASG). All participants are encouraged to take the facts, ideas, and opinions presented here into consideration so that they may strengthen their arguments. If you wish to be a contributor, please send an email to faitasi37@yahoo.com.

Friday, December 30, 2005

Bye Bye Blue Sky

Dear Blue Sky,

Thank you for your great service to the people of American Samoa with your cool cell phones, competitive prices and neat promotions. But I like to save the ASG, Governor Togiola and the Fono the trouble and ask you to cease and desist with your operations. To tell you the truth, we don’t want you anymore.

See, with you around, the danger of the ASTCA not repaying the $10 million LBJ loan is great. We do not want to pay for the actual costs of healthcare individually. We want our telecommunication consumers and retirees to pay for it in our elaborate redistribution scheme. American taxpayers are starting to refuse to pick up the tab this time around and are actually demanding accountability. They’re horrible, cruel and mean for doing so, and so it’s time to steal from somebody else.

Living life without being personally financially responsible for the costs of healthcare has been good to us. We don’t have to watch our weight, exercise and eat healthy to avoid such health problems that plague our society today. What is responsibility anyway? Plus, we can't ever imagine giving up spending money on alcohol, cigarettes, SUVs, and other luxuries and pass-time favorites before paying for healthcare ourselves.

Yeah, and we really don’t want to pool our money together because some say we’re just too stupid to account for it on our own. We can’t learn by trial and error, and market incentives and economic principles don’t apply in our territory. Some people also suggest charity, but who really does that? Our politicians don’t do it, but they sure are pretty generous with other people’s money.

No one really cares to help his or her neighbor voluntarily and everyone should be spared from the embarrassment of asking for a helping hand. Hell, we even made it illegal to stand alongside the road and ask for money.

Nope, people should be forced to give because their property doesn’t belong to them. You have no right to your property. It belongs to the good of society and to the will of the majority.

If it wasn’t for that damn constitution, we could vote your competitive business off our island tomorrow. As a result, we’re going to have to work around it.

If you start to lower prices to attract more customers away from your government competitor, we will pass a law to set fair market prices for you and your customers. If that doesn’t work, and consumers still freely choose your company over the government, we will vote in a quota system and limit the number of cell phones you can sell. If you’re still around, we’ll bury you underneath a 1000 pages worth of regulations and complicate your life with ridiculous licensing requirements.

We just can’t thank you enough for being silent on this issue, Blue Sky. It’s easy to sacrifice the lamb when it’s not squealing to stay alive.

Thursday, December 22, 2005

Taxation Begets More Taxation

I apologize to Mr. Goldthwaite for using his name one time in my letter to the editor. I had to list his name alongside those who would also propose obsolete and archaic redistribution schemes. Anyhow, Mr. Goldthwaite did bring up some good points that I would like to expound upon.

First, I don’t believe it’s fair to call politicians criminals, jokingly or not. Even they should be presumed innocent until proven guilty by a jury of their peers. Nonetheless, what I do despise is a politician’s tendency to be philanthropic with other people’s money. Such a tendency is immoral, inefficient and destructive.

Second, I do believe that the temptation to steal is better regulated in a free market than in our political system. If the board of a group insurance plan (from a church, employer or any group of people) can’t account for the pooled money, we can vote them off the board the next day, sue them and/or take our money to another group insurance plan. All of which we can barely do with a government agency funded by our taxes.

In a free market, we need the ASG to enforce contracts and protect property for the very fact that there is a temptation to lie, steal and cheat. Contracts and property rights are pillars of a free market in which a limited government is obliged to enforce and protect.

Third, who’s more of a Mr. Scrooge here: Myself, for wanting to keep my own money, or redistribution proponents, for wanting to take my money through the force of taxation? Not only do I want to keep more of the money I make for myself, but I also want everyone to keep more of their own money. Merry Christmas!

Redistribution doesn’t solve our problems whether it’s on our property, fatty foods, or bottled water and sodas - just ask the Soviets or what’s left of them.

Mr. Goldthwaite wrote that “the basic principle of a property tax is to establish an equitable tax base that does away with all those annoying, ever-increasing nickel-and-dime taxes and other futile city council measures like upping license fees every year, etc., etc.” If this is true, then why does Hawaii, after having one of the highest property taxes in the nation, also have one of the highest sales tax (a 4% GET that doubles with every transaction), transient accommodation taxes, bottle taxes, liquor and tobacco taxes, conveyance taxes, personal and corporate income taxes and gasoline taxes, and has recently increased sewer and vehicle registration fees?

Monday, December 19, 2005

Congress is being criticized for funding pork projects and for a general lack of fiscal restraint. Many people agree that there is a spending problem in Washington, but not many understand the fundamental causes.

Why have Republicans abandoned their pledge in the 1994 Contract with America to cut "government that is too big, too intrusive, and too easy with the public's money"? Did the GOP simply decide that it was good politics to buy votes with lavish special-interest spending?

That is one cause of the budget crisis, but not the core problem. With the extraordinarily high reelection rates in Congress, any political advantage gained from special-interest spending is not crucial. The real problem is the pro-spending mindset ingrained in long-time legislators. It's called "Potomac Fever," and it causes members of Congress to see themselves as philanthropists with unlimited means to solve every problem in society.

Potomac Fever is fueled by the thousands of interest groups in Washington that trumpet the benefits of favored programs. For legislators, spending rewards their egos because they get lauded in the media for their noble public service, they get praised by program beneficiaries, they get toasted at gala dinners in their honor, and they get buildings and highways named after them.

Unfortunately, members of Congress forget that they are spending other people's money. They don't consider the private activities that would occur if resources weren't redirected to Washington to fund their "philanthropy." They become program advocates, rather than referees who judge program merits against concerns about tax levels and adherence to the Constitution.

This phenomenon is evident in the biographies on many congressional websites. Many members boast of the awards they have won for supporting special-interest spending. By my count, the Senate's top recipient of special-interest awards is Patty Murray (D., Wash.). Her website proudly lists 81 pro-spending awards including "Friend of the Farm Bureau," the "Golden Spike Award" for her support of Amtrak, and the "Lifetime Leadership for Quality Childcare Award."

Senator Murray's website also lists awards for spending on veterans and economic development programs and her "tireless support of Asian Pacific elders." She has won awards for "leadership in building communities that thrive," "improving the quality of child care," and an award for "support of children and families in the nation." Add all that to her "Distinguished Humanitarian Award," and the senator could be mistaken for Mother Teresa!

Other top "philanthropists" in the Senate include Barbara Boxer (D., Calif.), who lists 67 pro-spending awards, and Mike DeWine (R. Ohio), who lists 44 . Senator DeWine's website says that he has spent his entire 30-year career in "public service" working on behalf of "our children" and "citizens across the globe." It touts his awards for "leadership in reducing global hunger and disease" and his "work to improve mental health care for all Americans."

Such puffery goes to the heads of politicians. Consider Sen. Ted Stevens (R., Alaska), who is a champion special-interest spender on highways, arts, and public television. The Corporation for Public Broadcasting gave him its "most prestigious honor" for support of "public broadcasting on behalf of our nation." The senator's ego is so closely tied to his spending activities that he threatened to retire if funding for his wasteful "bridge to nowhere" was cut from the recent highway bill.

The spending impulse of Stevens and other legislators is reinforced at every turn in Washington. Congressmen are bombarded with funding requests during visits from constituents, at receptions, in phone calls to campaign contributors, in meetings with lobbyists, in discussions with other members, and in news articles.

Congressional hearings add to the pro-spending climate. Rather than being like court proceedings, where a balance of views is heard, hearings are dominated by witnesses who favor more spending. Witnesses skillfully flatter members for their wise support of supposedly vital programs.

What medicine can cure Potomac Fever? Congressional term limits would help. Tight caps on overall spending would help. Better understanding of the failures of government programs would help. But first we need to appreciate that politicians enjoy spending, they gain esteem from it, and most of them see their role as philanthropists, not defenders of the taxpayer or the Constitution.

Thursday, December 15, 2005

Redistribution Can't Fix LBJ

The public hearings over the new hospital fees expose one truth about contemporary attitudes towards healthcare: no one wants to pay for it. People, nowadays, treat the imposition of higher fees like some crime against humanity. To pay for what you receive is practically unheard of, unwanted and distrusted in our great territory.

Now, advocates of redistribution propose “new” taxes on property, bottled water, fatty foods and anything else that comes within their crosshairs during their fancies of theft and confiscation to fund our hospital.

Instead of relying on their repackaged redistribution schemes again and again, we need to move forward in making the provider and the consumer deal directly with each other.

Fees should cover costs instantly, and the board should apply them equally for both rich and poor. The LBJ Board should be aiming to make a profit, and their fees need to reflect that goal. On top of that, the LBJ should face open competition, and to do that, the ASG should cut all ties with the entity, cut all the red tape and licensing requirements, and ask healthcare entrepreneurs to come.

Patients, the people, need to pool their money together voluntarily. Religious congregations will be the best place to start. They can easily set up bank accounts. The church can require members to donate a certain minimum every month. They can vote on which medical services their pooled money will pay for. They can also add in deductibles and co payments for less popular medical needs to cater to other members. Strict accountability would be required lest members go to another church for a better medical insurance plan.

Any group of people who want to put their money together should do so. Get the ASG out of the way and get the community involved in helping solve the LBJ problem. The government only needs to enforce contracts and punish those who fraud, cheat and steal from others.

In following this approach, market incentives will address, improve and lower the cost of healthcare while charity and community cooperation will make for a more humane, civil and caring society.

My ideas may sound radical, but who’s tired (except for me apparently) of the same old redistribution schemes heralded by proponents like Thomas Goldthwaite, Governor Togiola, the Fono and others?

Friday, December 09, 2005

Commerce Commission Guilty of Real Collusion

Whenever businesses agree to set the same prices for their identical products, politicians call that collusion. Politicians exploit people’s fear of collusion to accuse businesses of some imaginary power to set market prices. Why do I call it imaginary?

If I agreed with a competitor to set the same prices for our identical products, he and I are attempting to collude to set market prices. Our scheme would work if our costs were the same and they stayed that way. But that is hardly ever the case.

As soon as I can lower my costs, I realize that I can make more profit by selling more than my competitor sells by lowering the price of my product. Therefore, the profit motive entices both my competitor and I to break the collusion when the opportunity arises.

The Commerce Commission, on the other hand, with the power of government sets the price for all bus and taxi fares. Instead of righteously convicting the Commerce Commission or the ASG of collusion, they are praised for smart government planning.

When businesses collude, the people see such action as wrong and immoral. When the government colludes for businesses, the people see this as smart, clever and the right thing to do. When businesses collude, the profit motive entices conspirators to break the collusion. When the government colludes for businesses, nothing but a rare and responsible vote can break up the government cartel.

Bus and taxi drivers may like the idea that their competition can’t undercut their own individual prices. They may feel some sense of security with that mindset. However, that security comes at a cost. When expenses for items like gas go up, bus and taxi operators can’t charge a higher price to pay for them. If a bus driver knows he can attract more customers by installing air conditioners but can’t charge a higher price to pay for it, then there are no air conditioned buses. Moreover, if a bus driver lowers his costs and wants to pass it on to consumers in the form of lower prices, he can not, lest he be convicted of unfair competition.

Bus and taxi drivers and riders, and the people should vote for the abolishment of the Commerce Commission, price caps and price floors. They have no place in a free and moral market.

Friday, December 02, 2005

Cease and Desist With Price Gouging Rhetoric

Senator Lolo Moliga finds no end for his price-gouging rhetoric. He constantly accuses businesses of unfairness and immorality, and he believes that some fair government action will bring some fair price to the cost of gasoline. When will this nonsense end?

His mentality, his philosophy, his reasoning about business has to be consistent. Senator Moliga would, in one breath, accuse a business charging the highest price of being a monopoly or with the intent to monopolize, a business charging the lowest price of unfair competition, and a business charging the same price as other companies of collusion.

Businesses are accused of every ill found in society whether it be high prices, low prices or the same prices.

Politicians need to grow up.

No one took the same risk gas station owners took when they first started out. As a matter of fact, if the entrepreneur failed, no one shed a tear for them. Business people take a risk most of us find too scary. If they fail, we don’t care. But if they succeed, their success all of a sudden becomes a public good.

Nonsense.

If Senator Moliga is so self-righteous about what gas stations should charge the consumer, then Senator Moliga needs to open his own gas station. Let him charge so-called responsible prices.

People say that without government restrictions, the sky would be the limit for prices. Not true for something like bread, for we know anyone can make and sell loafs for anything below $2.